TOWARDS YET ANOTHER AGE OF CREATIVE DESTRUCTION?
Journal Title: Journal of Globalization Studies - Year 2010, Vol 1, Issue 1
Abstract
This article analyses economic growth and social development in 173 coun-tries. With global economic gravitation shifting to the Indian Ocean/Pacific region (Frank 1998), the article analyses especially the role of MNC (foreign capital) penetration as the key variable of past quantitative dependency studies for contemporary economic growth and social performance. In a Schumpeterian fashion, MNC penetration reflects the power, which transnational oligopolies wield over local economies. Today, social polarization and stagnation increase as a consequence of the development model, based on high MNC penetration. Economic growth in the long run in the outgone Kuznets-cycle 1990– 2005 was strongly determined by the long-run positive effects of foreign direct investments per GDP of the host countries, while at the same time – and contrary to the traditional expectations of neo-classical economics – the more short-term effects of heavy foreign direct investment inflows on the host countries of FDI were very negative. Other results reported here also confirm our reasoning: the logic of the Kondratiev cycle 1975–2005; inequality, gender empowerment, the Human Development Index, and life expectancy all confirm our Schumpeterian explanation, presented in this article. East and South-East Asia emerge as the real growth engines of the world economy.
Authors and Affiliations
Arno Tausch
Keywords
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